VW says it’s reached agreement to resolve supplier dispute

Commerzbank AG estimated the stoppage, now in its fifth day, could cut profit by as much as $79 million a week.

But German news agency DPA said there were two suppliers that had disrupted deliveries – one that makes textiles and leather for vehicle interiors and another that specialises in cast parts for gearboxes. With Hastor’s sons in control and now seeking to diversify the company, Prevent has adopted a more aggressive business style, according to two people familiar with their plans, who asked not to be named discussing internal matters. He said that was a “severe burden” for the automaker. “The dispute is coming during an inconvenient time for VW”, with its reputation still marred by the emissions-cheating scandal. The stock has declined 10 percent this year, valuing Europe’s biggest carmaker at $72.5 billion.

A spokesman for Prevent, the parent company of the two firms, told German business daily Handelsblatt on Friday that VW was imposing “unacceptable conditions” on its suppliers. Due to this financial damage, analyst believes that the company’s earnings are in jeopardy, which Volkswagen has been trying to lift since the diesel emission scandal.

Sister companies ES Automobilguss and CarTrim have accused VW of cancelling contracts without providing compensation.

The conflict started when VW reportedly backed out of a contract with suppliers and refused to pay them for costs related to the deal.

“Although the state court in Brunswick issued temporary injunctions requiring the suppliers to resume deliveries, they so far haven’t fulfilled this obligation”, the VW statement read. A decision on VW’s latest filing is not expected until Thursday at the earliest.

“It involves thousands of jobs that could be affected by short-time working”.

As a result of the supply problems, the vehicle producer is cutting work hours at six of its plants. Both have withheld parts deliveries to pressure the automaker as settlement negotiations continue.